SIX-listed biotechs light up exceptional trading year

Fabian Gerber SIX | Senior Relationship Manager Primary Markets

Embedded in one of the world's most comprehensive life sciences ecosystems, biotech companies listed on the Swiss Stock Exchange benefited from outstanding visibility among investors and the media in 2020.

Rarely before has so much been written about the sector as in the Funding growth and resilience in past year, and numerous companies made a name for themselves challenging times with studies, applications for approval and trial results. An IPO is more than a one-time capital raising event, and listed Despite a challenging market environment, most biotech companies can more efficiently raise additional capital through companies managed to further develop their product pipelines follow-on equity capital transactions. Especially last year, the over the course of the year and in some cases were able to report public capital markets played a very important role in ensuring considerable successes – certainly an indication of the sector’s companies' ongoing access to capital. high level of agility and innovation. In 2020, companies listed on SIX raised a total of CHF 5.7B in Of the total announcements made by biotech companies1 listed fresh equity capital aimed at driving growth or strengthening on SIX, 84% had a positive impact on the company’s share price capital structure. In this respect, 2020 was one of the most with an average rise of 9.6%2 recorded on the day of the active years in a long time on the Swiss Stock Exchange, with announcement. several biotech companies involved.

Compared to 2019, trading volumes rose sharply by 177% and This demonstrates the Swiss capital market’s ability to satisfy the total free float market capitalization of all SIX-listed biotech the funding needs of biotech companies, even in uncertain companies was up 30% on 2020. times with high market volatility. Most notable amongst these were the transactions outlined in the following table.

COMPANY AMOUNT PURPOSE DATE 2020

CHF 330M Market launch of daridorexant and financing of May 20 Idorsia CHF 536M further pipeline products October 23 Development MP0420 (SARS-CoV-2) and Molecular Partners CHF 80M July 7 expansion of pipeline resources Finance of operations and preparations for the US Cassiopea CHF 25M June 18 launch of ‘clascoterone cream 1%’ Advance and accelerate commercial rollout of Kuros Biosciences CHF 19M October 20 MagnetOs

ObsEva CHF 18M Financing of further pipeline development September 20

Source: SIX

Two months after the Idorsia share placement in May 2020, Molecular Partners successfully raised fresh capital in early July through an accelerated book building process. In the transaction, 5.53 million new shares were issued at a share price of CHF 14.50. The proceeds were used to accelerate the development of its novel antiviral SARS CoV-2 candidates ensovibep (MP0420) and MP0423, and to expand the early-stage clinical and preclinical pipeline resources.

1 The sample group includes: Addex, Basilea, Evolva, Idorsia, Kuros Biosciences, Molecular Partners, Newron Pharma, ObsEva, Polyphor, Relief Therapeutics and Santhera 2 Source: Bloomberg and Factset (average stock return on negative news: -19.6%)

None of the information contained herein constitutes an offer or a recommendation to buy or sell or take any other action regarding financial instruments. SIX Group Ltd or its direct and indirect subsidiaries (hereafter: SIX) are liable neither for the completeness, accuracy, currentness and continuous availability of the information given, nor for any loss incurred as a result of action taken on the basis of information provided in this or any other SIX publication. SIX expressly reserves the right to alter prices or composition of products or services at any time. © SIX Group Ltd, 2021. All rights reserved. 36 “Compared to 2019, trading volumes rose sharply by 177% and the total free float market capitalization of all SIX-listed biotech companies was up 30% on 2020”

The offering included the participation of selected new and existing institutional investors in and the European Union. However, the large majority of investors involved in this transaction came from the United States, illustrating the high visibility and attention the company achieved with its SIX primary listing among US investors.

Molecular Partners moves into the spotlight Along with existing oncology programs, Molecular Partners unveiled in April 2020, that it had been working on developing multiple antiviral compounds against the rapidly spreading pandemic and announced the testing of its DARPin® technology to combat the coronavirus.

As early data began to emerge at the beginning of May 2020, the identified drug candidates showed very high antiviral activity in the laboratory, completely neutralizing the virus. The share price took off with high trading volumes but fell back at the end of June 2020 when the FDA rejected the application for the ophthalmic drug abicipar because in the cost/benefit assessment, the risks associated with the present formulation were weighted higher. However, investor confidence returned fast in the second half of the year as positive announcements followed in quick succession.

The increased interest in the company is reflected in both price movements and impressive trading volumes, which went up sharply in the second half of 2020 and settled at substantially higher average levels compared with previous years. This development was also driven by the strong upward swings on the days corresponding with official announcements, which can be seen in the chart below.

CHF CHF M. CHF M 20.7 CHF M 36.6 160 16

2 140 14 4 120 1 12

100 10 6 80 8 5 3 60 6

40 4

20 2

0 0 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug -20 Sep-20 Oct-20 No v-20 Dec-20

Molecular Partners (daily turnover in CHF M, right scale) Molecular Partners SXI Bio+Medtech SPI

1 20.04.2020: Launch of the 3 07.07.2020: Capital increase (CHF M 80.2) 5 28.10.2020: Announcement of cooperation anti-COVID-19 program with

2 07.05.2020:Con昀rmation of Ultra-Potent 4 11.08.2020: Agreement with Swiss 6 23.11.2020: First cohort in Phase I trial of ® Inhibition by anti-COVID-19 DARPin government (BAG) candidate MP0420 Sources: SIX and FactSet

The chart also shows that Molecular Partners, with an annual performance of +18.3% in 2020, was able to outperform the SPI (+3.0%) and finished the year slightly better than the SXI Bio+Medtech Index3 (+17.5%), which once more clearly outperformed the SPI, highlighting the underlying attractiveness of the sector.

The increased investor interest and positive share price development enabled Molecular Partners to absorb the capital increase of early July 2020 and its free-float market capitalization increased by 72.8% year-on-year to CHF 490M by the end of 2020.

More insights on Molecular Partners' eventful year 2020 and their plans for 2021 can be found in the following interview with the company's CEO Patrick Amstutz

3 The SXI Bio+Medtech is the more narrowly defined sub-index of the SXI Life Sciences Index (Biotech, Medtech, Pharma), that consists of SIX primary listed companies from these sectors that have a minimum free float market capitalization of at least CHF 100M. The weighting of individual stocks on the index is limited at 10%.

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